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Question: 7 suppose the hourly wage is 10 the price of...

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7. Suppose the hourly wage is $10, the price of each unit of capital is $20, and the price of output is $60 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is a. Find the MPE (4 pts) b. If the firm is maximizing profits, what must the ratio of MPE to MPK be? What must the ratio of E to K be? Hint MPK-dQ/dK- 1/3K 23 E13 (2 points) c. Find the FOCE Use the FOCE and the ratio of E to K to find the optimal level of E. Then find the optimal level of K, (3 points)

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